1 00:00:04,240 --> 00:00:07,240 Speaker 1: Welcome to Tech Stuff, a production of I Heart Radios 2 00:00:07,320 --> 00:00:14,080 Speaker 1: How Stuff Works. Hey there, and welcome to tech Stuff. 3 00:00:14,120 --> 00:00:17,400 Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer with 4 00:00:17,520 --> 00:00:20,919 Speaker 1: I Heart Radio and I love all things tech, and 5 00:00:21,000 --> 00:00:23,480 Speaker 1: today I thought I would explore something that's kind of 6 00:00:23,520 --> 00:00:26,759 Speaker 1: related to technology and that you see it in tons 7 00:00:26,840 --> 00:00:29,920 Speaker 1: of like tech startups and Silicon Valley. But if we're 8 00:00:29,920 --> 00:00:34,080 Speaker 1: being honest, this topic actually goes well beyond tech. It's 9 00:00:34,120 --> 00:00:36,720 Speaker 1: just that tech is one of those more visible places 10 00:00:36,720 --> 00:00:40,479 Speaker 1: where it shows up. And it's the concept of fake 11 00:00:40,520 --> 00:00:43,680 Speaker 1: it until you make it, which is a philosophy I 12 00:00:43,840 --> 00:00:48,560 Speaker 1: personally find particularly distressing because it frequently does not turn 13 00:00:48,600 --> 00:00:53,519 Speaker 1: out well for everybody involved. And I realized that this 14 00:00:53,560 --> 00:00:56,720 Speaker 1: episode poses a very real danger of diving into grouchy 15 00:00:56,880 --> 00:01:00,480 Speaker 1: old man complains about those young people terror worry. But 16 00:01:01,120 --> 00:01:03,760 Speaker 1: believe me, that's not what I intend. And I don't 17 00:01:03,800 --> 00:01:07,080 Speaker 1: even necessarily think it's the fault of young people, because, 18 00:01:07,120 --> 00:01:09,800 Speaker 1: for one thing, folks like me and older we can 19 00:01:09,840 --> 00:01:12,119 Speaker 1: fall prey to this type of thinking, and we do 20 00:01:12,280 --> 00:01:16,679 Speaker 1: all the time. And for another, the very concept has 21 00:01:16,720 --> 00:01:19,800 Speaker 1: been taking root for decades, so back when I was 22 00:01:19,920 --> 00:01:23,000 Speaker 1: a young person. We were really starting to see this 23 00:01:23,120 --> 00:01:25,960 Speaker 1: come to fruition already, So you can't blame it on 24 00:01:26,000 --> 00:01:29,039 Speaker 1: the millennials, is what I'm really getting at. So what 25 00:01:29,080 --> 00:01:33,480 Speaker 1: the heck am I talking about? Well, basically, you probably 26 00:01:33,520 --> 00:01:36,280 Speaker 1: are familiar with the concept. The fake it until you 27 00:01:36,319 --> 00:01:39,800 Speaker 1: make it strategy goes something like this. You come up 28 00:01:39,920 --> 00:01:43,039 Speaker 1: with an idea and it's a really compelling idea. Maybe 29 00:01:43,120 --> 00:01:45,759 Speaker 1: it's for a product or a service, maybe it's for 30 00:01:45,800 --> 00:01:48,000 Speaker 1: an event you want to throw, but whatever it is, 31 00:01:48,480 --> 00:01:51,320 Speaker 1: you think of it as really awesome idea and an 32 00:01:51,360 --> 00:01:54,400 Speaker 1: idea for him, it is pretty darn cool. People agree 33 00:01:54,440 --> 00:01:57,080 Speaker 1: with you, that's a great idea. But then to go 34 00:01:57,200 --> 00:02:00,480 Speaker 1: beyond an idea, you're gonna need to take some big 35 00:02:00,520 --> 00:02:04,800 Speaker 1: steps to actually create the product or the service or 36 00:02:04,840 --> 00:02:07,360 Speaker 1: to throw the event or whatever it is. It's going 37 00:02:07,400 --> 00:02:09,639 Speaker 1: to take a lot of effort, and it might require 38 00:02:09,720 --> 00:02:13,679 Speaker 1: innovation and development in the tech sector, So if you're 39 00:02:13,840 --> 00:02:17,040 Speaker 1: developing a product, a brand new product, or an underlying 40 00:02:17,160 --> 00:02:21,160 Speaker 1: infrastructure to support a service or event, you're gonna have 41 00:02:21,200 --> 00:02:24,000 Speaker 1: to innovate in that space, and it's going to take time, 42 00:02:24,120 --> 00:02:26,200 Speaker 1: and it's going to take resources, and it might end 43 00:02:26,280 --> 00:02:29,440 Speaker 1: up being really expensive, and of course we all know 44 00:02:29,600 --> 00:02:33,240 Speaker 1: there's never a guarantee that an idea will actually work 45 00:02:33,360 --> 00:02:35,760 Speaker 1: as you transition from the world of ideas to the 46 00:02:35,760 --> 00:02:41,440 Speaker 1: world of reality, so that means that ideas also represent risk. 47 00:02:42,240 --> 00:02:45,360 Speaker 1: There's a real risk that things are not going to 48 00:02:45,400 --> 00:02:49,160 Speaker 1: work out. So maybe your idea is great on paper, 49 00:02:49,440 --> 00:02:53,079 Speaker 1: but it turns out it's not practical in reality. Or 50 00:02:53,120 --> 00:02:55,720 Speaker 1: maybe it turns out it's just a bit too fanciful 51 00:02:55,919 --> 00:02:57,840 Speaker 1: and there's no real way to pull it off in 52 00:02:57,840 --> 00:03:00,880 Speaker 1: the real world. Maybe your idea, you know, it sounds 53 00:03:00,960 --> 00:03:06,040 Speaker 1: more like wishful thinking than a realistic idea, a realistic concept, 54 00:03:06,440 --> 00:03:09,280 Speaker 1: or maybe it's possible, but it turns out it's going 55 00:03:09,320 --> 00:03:12,079 Speaker 1: to take way longer to get to a point where 56 00:03:12,080 --> 00:03:15,799 Speaker 1: you can actually make it happen, and it takes way 57 00:03:15,840 --> 00:03:19,239 Speaker 1: longer than you had initially anticipated or projected. Now you 58 00:03:19,280 --> 00:03:22,000 Speaker 1: won't know any of this for sure until you take 59 00:03:22,000 --> 00:03:25,840 Speaker 1: on the challenge of making your idea a reality. But 60 00:03:26,280 --> 00:03:29,880 Speaker 1: it's really impossible to estimate how big of an investment 61 00:03:29,919 --> 00:03:33,079 Speaker 1: of your time, talent, and money it's going to require, 62 00:03:33,480 --> 00:03:35,520 Speaker 1: or how much you might waste if it all goes 63 00:03:35,560 --> 00:03:38,960 Speaker 1: belly up. It might be that you finally achieve your idea, 64 00:03:39,280 --> 00:03:42,480 Speaker 1: but by the time you get there, the results you 65 00:03:42,520 --> 00:03:45,360 Speaker 1: have don't justify the amount of effort it took to 66 00:03:45,440 --> 00:03:47,920 Speaker 1: get to that point. We've seen tons of this sort 67 00:03:47,960 --> 00:03:53,560 Speaker 1: of thing on crowdfunding campaigns where the concept was something 68 00:03:53,600 --> 00:03:57,440 Speaker 1: that people really identified with, It resonated with the audience, 69 00:03:57,800 --> 00:04:01,680 Speaker 1: and there was a huge support system thrown in, lots 70 00:04:01,680 --> 00:04:04,520 Speaker 1: of money pouring in to make this idea reality. And 71 00:04:04,560 --> 00:04:08,640 Speaker 1: then in the cases where something actually was made, sometimes 72 00:04:08,680 --> 00:04:12,800 Speaker 1: it falls far short of where people expected, and in 73 00:04:12,840 --> 00:04:15,640 Speaker 1: that case you could say, like, well, technically the idea 74 00:04:15,640 --> 00:04:19,240 Speaker 1: became a reality, but it wasn't worth all the effort 75 00:04:19,240 --> 00:04:21,200 Speaker 1: and money that went into making it happen in the 76 00:04:21,279 --> 00:04:24,960 Speaker 1: first place. In worst case scenarios, you don't get anything 77 00:04:25,000 --> 00:04:27,680 Speaker 1: at all. It all fails before you ever get anything. 78 00:04:28,520 --> 00:04:34,039 Speaker 1: So chances are, unless you have direct access to considerable 79 00:04:34,080 --> 00:04:36,760 Speaker 1: wealth and you don't mind the possibility of losing a 80 00:04:36,800 --> 00:04:39,800 Speaker 1: good deal of it, you'll want to find other people 81 00:04:40,040 --> 00:04:42,920 Speaker 1: to help make your idea become a reality. You're gonna 82 00:04:42,960 --> 00:04:46,400 Speaker 1: need investors, and investors can be great. They can pour 83 00:04:46,480 --> 00:04:49,159 Speaker 1: money into your project and fund your work to bring 84 00:04:49,279 --> 00:04:51,840 Speaker 1: your idea to life. And when your idea is a 85 00:04:51,880 --> 00:04:55,080 Speaker 1: smashing success, you can pay back your investors, which is 86 00:04:55,120 --> 00:04:58,000 Speaker 1: totally cool because you'll continue to make money as your 87 00:04:58,040 --> 00:05:01,960 Speaker 1: idea continues to kick but or maybe the idea doesn't 88 00:05:02,000 --> 00:05:06,159 Speaker 1: pan out, and that's a bummer. But with investment comes risk. 89 00:05:06,320 --> 00:05:09,680 Speaker 1: People understand that generally speaking, and so you've kind of 90 00:05:09,760 --> 00:05:13,400 Speaker 1: mitigated the risk to yourself by spreading it among all 91 00:05:13,400 --> 00:05:17,560 Speaker 1: your investors. And maybe you'll have to liquidate everything related 92 00:05:17,600 --> 00:05:20,400 Speaker 1: to your idea in the worst case scenario, right, maybe 93 00:05:20,400 --> 00:05:24,040 Speaker 1: you've created a little company to bring your idea to 94 00:05:24,279 --> 00:05:26,480 Speaker 1: reality and it doesn't work out and you have to 95 00:05:26,520 --> 00:05:29,680 Speaker 1: liquidate all your assets and give all that to your investors. 96 00:05:29,880 --> 00:05:33,080 Speaker 1: But even then, really you're probably no worse off than 97 00:05:33,120 --> 00:05:36,400 Speaker 1: you were before you got started, assuming you haven't done 98 00:05:36,440 --> 00:05:41,680 Speaker 1: anything criminal like defraud investors and then got caught. So 99 00:05:41,920 --> 00:05:44,880 Speaker 1: assuming everything was on the up and up, you're probably 100 00:05:45,279 --> 00:05:47,720 Speaker 1: you know, back to square one, but you're not set 101 00:05:47,760 --> 00:05:52,120 Speaker 1: back further than that. Now. Investors do expect results, but 102 00:05:52,440 --> 00:05:54,800 Speaker 1: at times they can be pretty darn patient about it, 103 00:05:55,120 --> 00:05:59,560 Speaker 1: and many might essentially be speculators. Right they're looking for 104 00:05:59,600 --> 00:06:02,440 Speaker 1: a big payout and that could come in the form 105 00:06:02,520 --> 00:06:06,720 Speaker 1: of a smashing success an idea that is truly remarkable 106 00:06:06,760 --> 00:06:09,800 Speaker 1: and innovative and compelling, or it might come to fruition 107 00:06:10,040 --> 00:06:13,000 Speaker 1: if some bigger fish out there sees you and your 108 00:06:13,080 --> 00:06:15,960 Speaker 1: project and then offers to buy it up from you. 109 00:06:16,360 --> 00:06:19,479 Speaker 1: A lot of startups actually operate in this way. They 110 00:06:19,520 --> 00:06:22,640 Speaker 1: aren't trying to make a successful business so much as 111 00:06:22,720 --> 00:06:26,000 Speaker 1: generate a ton of interest. Even if they don't have 112 00:06:26,040 --> 00:06:29,240 Speaker 1: a means of generating revenue, they'll still try to generate interest, 113 00:06:29,520 --> 00:06:32,720 Speaker 1: and the goal is to have some bigger entity like 114 00:06:32,800 --> 00:06:36,040 Speaker 1: an Apple or an Amazon, or a Google or a Facebook, 115 00:06:36,600 --> 00:06:39,440 Speaker 1: to have them come around and gobble up this smaller 116 00:06:39,560 --> 00:06:42,600 Speaker 1: company for a princely sum. For a lot of folks, 117 00:06:42,920 --> 00:06:46,119 Speaker 1: that is the dream. It's it's not necessarily making something 118 00:06:46,160 --> 00:06:48,840 Speaker 1: that works. It's making an idea that some other company 119 00:06:48,920 --> 00:06:52,080 Speaker 1: finds really really interesting and they'll pay you for it. 120 00:06:52,720 --> 00:06:54,880 Speaker 1: And that means that you don't even necessarily have to 121 00:06:54,920 --> 00:06:57,600 Speaker 1: make a thing that works. You just have to convince 122 00:06:58,040 --> 00:07:01,320 Speaker 1: people that you know it's something they want to work. 123 00:07:02,480 --> 00:07:04,680 Speaker 1: It's tricky, and this gets down to what I want 124 00:07:04,680 --> 00:07:07,880 Speaker 1: to talk about today. A lot of people operate in 125 00:07:07,920 --> 00:07:11,480 Speaker 1: a sort of holding pattern. They have come up with 126 00:07:11,640 --> 00:07:15,280 Speaker 1: their idea, and it's possible that they sincerely believe they 127 00:07:15,320 --> 00:07:17,960 Speaker 1: can bring it into reality if they have the right 128 00:07:18,440 --> 00:07:22,880 Speaker 1: resources at their disposal. Maybe they realize right away that 129 00:07:22,920 --> 00:07:25,240 Speaker 1: their idea is untenable. That can happen to You can 130 00:07:25,320 --> 00:07:27,680 Speaker 1: have people who say, you know what, I don't think 131 00:07:27,760 --> 00:07:29,680 Speaker 1: I can do this, but if I can convince other 132 00:07:29,800 --> 00:07:33,600 Speaker 1: people that I can do it, that's good enough. Or 133 00:07:33,800 --> 00:07:37,360 Speaker 1: you sometimes get people who from the very beginning they 134 00:07:37,400 --> 00:07:41,520 Speaker 1: intended to fleece investors out of money. But whether their 135 00:07:41,520 --> 00:07:45,560 Speaker 1: intentions are pure or otherwise, they tend to engage in 136 00:07:45,600 --> 00:07:48,360 Speaker 1: the fake it until you make it strategy. And if 137 00:07:48,360 --> 00:07:52,480 Speaker 1: it sounds like you are passionate and smart, people will 138 00:07:52,520 --> 00:07:55,720 Speaker 1: give you way more slack and credit, then you'll have 139 00:07:55,760 --> 00:07:59,040 Speaker 1: more opportunities to keep all the plates spinning at least 140 00:07:59,080 --> 00:08:02,160 Speaker 1: a little while longer. So in the best case scenario, 141 00:08:02,480 --> 00:08:06,000 Speaker 1: with sincere people, they can keep this process alive long 142 00:08:06,080 --> 00:08:09,280 Speaker 1: enough to actually achieve their goal of bringing whatever their 143 00:08:09,320 --> 00:08:12,920 Speaker 1: idea was to life. In a worst case scenario, people 144 00:08:12,960 --> 00:08:16,200 Speaker 1: get caught in a disastrous situation in which they hurriedly 145 00:08:16,240 --> 00:08:18,480 Speaker 1: seek out a way to get out of one catastrophe, 146 00:08:18,800 --> 00:08:23,280 Speaker 1: typically by jumping into a different catastrophe um sort of 147 00:08:23,280 --> 00:08:26,040 Speaker 1: the robbing Peter to pay Paul principle, This idea of 148 00:08:26,360 --> 00:08:30,760 Speaker 1: you're constantly trying to hustle to get money to cover 149 00:08:30,920 --> 00:08:34,120 Speaker 1: your last round of expenses, and that's what you're doing 150 00:08:34,240 --> 00:08:36,720 Speaker 1: over and over again, rinse and repeat. You're never actually 151 00:08:37,080 --> 00:08:42,559 Speaker 1: establishing a reliable way to generate revenue. You're just constantly 152 00:08:42,559 --> 00:08:46,120 Speaker 1: trying to stay ahead of the creditors. Now, a big 153 00:08:46,120 --> 00:08:50,280 Speaker 1: problem is that we've sort of mythologized the concept of 154 00:08:50,320 --> 00:08:54,480 Speaker 1: a genius entrepreneur. In fact, this is something, especially in 155 00:08:54,520 --> 00:08:58,640 Speaker 1: the United States, that has become iconic. Right Like, the 156 00:08:58,720 --> 00:09:04,200 Speaker 1: United States has a history full of these mythological tales 157 00:09:04,480 --> 00:09:08,920 Speaker 1: of various entrepreneurs and inventors, people like Thomas Edison or 158 00:09:09,000 --> 00:09:15,000 Speaker 1: Tesla or Westinghouse, you know, people who who genuinely were 159 00:09:15,080 --> 00:09:19,280 Speaker 1: very intelligent and very uh innovative and in the case 160 00:09:19,360 --> 00:09:23,800 Speaker 1: of Westinghouse and Edison, particularly good at business. But we 161 00:09:23,880 --> 00:09:28,439 Speaker 1: have since kind of elevated them to iconic status beyond 162 00:09:29,240 --> 00:09:33,199 Speaker 1: what we would typically think of for a regular human being. Right. Well, 163 00:09:33,240 --> 00:09:36,319 Speaker 1: that's a problem because we have created this sort of 164 00:09:37,120 --> 00:09:41,760 Speaker 1: mythological ideal to aspire to that maybe doesn't really exist. 165 00:09:42,760 --> 00:09:45,239 Speaker 1: But the whole concept is that we have an innovative, 166 00:09:45,280 --> 00:09:49,240 Speaker 1: disruptive mind who comes into some existing industry and shakes 167 00:09:49,280 --> 00:09:52,000 Speaker 1: everything up with a great idea that is in some 168 00:09:52,080 --> 00:09:55,959 Speaker 1: way superior over the existing models. A lot of these 169 00:09:55,960 --> 00:09:59,240 Speaker 1: thinkers tend to target specific industries with which we have 170 00:09:59,440 --> 00:10:01,560 Speaker 1: a lot of for stration. So I'm going to give 171 00:10:01,600 --> 00:10:04,520 Speaker 1: you an example with Uber. All right, So let's let's 172 00:10:04,520 --> 00:10:07,400 Speaker 1: flash back a couple of decades. Let's say that you're 173 00:10:07,520 --> 00:10:10,040 Speaker 1: visiting a place like New York City and you need 174 00:10:10,080 --> 00:10:12,959 Speaker 1: to get around, and you're not familiar with the city. 175 00:10:13,120 --> 00:10:15,600 Speaker 1: You're not familiar with the subway system, and that looks 176 00:10:15,600 --> 00:10:18,280 Speaker 1: pretty intimidating to you. You don't know, like going down 177 00:10:18,280 --> 00:10:19,920 Speaker 1: one says stairs, if you're going to be heading in 178 00:10:19,960 --> 00:10:22,800 Speaker 1: the right direction or not. You definitely don't want to 179 00:10:22,880 --> 00:10:25,280 Speaker 1: drive in the city because that looks like a heart 180 00:10:25,280 --> 00:10:29,240 Speaker 1: attack on four wheels. So you take taxis to get around. 181 00:10:29,640 --> 00:10:33,760 Speaker 1: But that experience might be less than ideal in some situations. 182 00:10:34,120 --> 00:10:37,240 Speaker 1: So maybe you're dealing with rude drivers, or maybe you're 183 00:10:37,320 --> 00:10:40,440 Speaker 1: left wondering if the driver was taking a long roundabout 184 00:10:40,480 --> 00:10:43,120 Speaker 1: way to your destination in an effort to drive up 185 00:10:43,160 --> 00:10:46,240 Speaker 1: the fair a few bucks. Maybe the driver spends a 186 00:10:46,240 --> 00:10:48,400 Speaker 1: lot of time trying to discourage you from using a 187 00:10:48,400 --> 00:10:51,520 Speaker 1: credit card and instead that you should pay with cash. 188 00:10:51,920 --> 00:10:54,680 Speaker 1: That has happened to me on numerous occasions in taxi 189 00:10:54,720 --> 00:10:57,640 Speaker 1: cabs in New York City. Maybe you just didn't feel 190 00:10:57,679 --> 00:11:01,080 Speaker 1: safe with the person for whatever reason. But on the 191 00:11:01,120 --> 00:11:03,440 Speaker 1: other hand, the taxis are pretty much the only game 192 00:11:03,480 --> 00:11:06,240 Speaker 1: in town at that point. You definitely wouldn't want to 193 00:11:06,320 --> 00:11:09,440 Speaker 1: jump into the car of some random driver who's offering rides. 194 00:11:09,880 --> 00:11:11,720 Speaker 1: A cab at least provides you with a feeling that 195 00:11:12,120 --> 00:11:15,160 Speaker 1: someone out there is managing all this stuff. There's some 196 00:11:15,400 --> 00:11:19,800 Speaker 1: overriding authority that has authorized this person to drive a cab, 197 00:11:19,840 --> 00:11:23,600 Speaker 1: and therefore things probably won't go too wrong. You know, 198 00:11:23,720 --> 00:11:27,600 Speaker 1: there's some comfort that there's a body that is regulating 199 00:11:27,600 --> 00:11:31,040 Speaker 1: this kind of stuff. Right. It's not necessarily a great experience, 200 00:11:31,080 --> 00:11:34,560 Speaker 1: but that's what you have to work with. But then 201 00:11:34,920 --> 00:11:37,280 Speaker 1: someone comes up with the idea of using a mobile 202 00:11:37,320 --> 00:11:41,720 Speaker 1: app on phones to connect riders with drivers, and the 203 00:11:41,720 --> 00:11:44,440 Speaker 1: app can search for all available drivers who are registered 204 00:11:44,480 --> 00:11:47,559 Speaker 1: with the service within a certain area. It can calculate 205 00:11:47,559 --> 00:11:49,439 Speaker 1: which of those drivers would be most likely to get 206 00:11:49,480 --> 00:11:52,520 Speaker 1: to the passenger. First, it could contact a small group 207 00:11:52,559 --> 00:11:55,199 Speaker 1: of them with the prospect of a ride. The drivers 208 00:11:55,240 --> 00:11:59,080 Speaker 1: could accept that job request and then header on over 209 00:11:59,120 --> 00:12:01,760 Speaker 1: your way to pick you up. The premise is that 210 00:12:01,800 --> 00:12:04,839 Speaker 1: this cuts down on wait times, particularly for people who 211 00:12:04,840 --> 00:12:07,360 Speaker 1: otherwise would just be standing on the side of the 212 00:12:07,400 --> 00:12:09,679 Speaker 1: street waiting for the next cab to pass by and 213 00:12:09,679 --> 00:12:12,400 Speaker 1: try to hail that cab with no guarantee that the 214 00:12:12,400 --> 00:12:15,080 Speaker 1: cab is actually gonna stop. Like you're you're limited to 215 00:12:15,120 --> 00:12:19,720 Speaker 1: which cabs you can see in the traditional cab hailing situation. 216 00:12:20,160 --> 00:12:23,520 Speaker 1: That has since changed, by the way, but we're comparing 217 00:12:23,920 --> 00:12:28,080 Speaker 1: the app version to the traditional taxi cabs situation or experience. 218 00:12:28,559 --> 00:12:32,560 Speaker 1: So this app also goes a step further. It facilitates 219 00:12:32,559 --> 00:12:35,800 Speaker 1: payment from the rider to the service, and then the 220 00:12:35,840 --> 00:12:38,800 Speaker 1: service pays a percentage of the fair out to the driver. 221 00:12:39,360 --> 00:12:43,000 Speaker 1: The service access is sort of dispatch and a cashier 222 00:12:43,080 --> 00:12:46,199 Speaker 1: all at once. Money need never needs to change hands 223 00:12:46,200 --> 00:12:49,520 Speaker 1: directly between the passenger and the driver. What's more, the 224 00:12:49,559 --> 00:12:52,280 Speaker 1: app can display a map for both the driver and 225 00:12:52,400 --> 00:12:55,120 Speaker 1: the passenger, so the person riding in the car can 226 00:12:55,360 --> 00:12:58,240 Speaker 1: be certain that the driver isn't going on some sort 227 00:12:58,240 --> 00:13:01,400 Speaker 1: of wild goose chase that can actually allow along. Moreover, 228 00:13:01,840 --> 00:13:04,600 Speaker 1: the service allows people to become drivers without having to 229 00:13:04,640 --> 00:13:08,000 Speaker 1: overcome the hurdles that taxi cab drivers must manage in 230 00:13:08,080 --> 00:13:11,560 Speaker 1: order to operate a cab legally. So in New York City, 231 00:13:11,600 --> 00:13:15,120 Speaker 1: there are a limited number of taxi licenses, so there's 232 00:13:15,160 --> 00:13:18,240 Speaker 1: always a cap on how many people can actually operate 233 00:13:18,280 --> 00:13:22,680 Speaker 1: a taxi cab legally in the city. These licenses are 234 00:13:22,760 --> 00:13:26,680 Speaker 1: called medallions, and medallions can be bought and sold, and 235 00:13:27,040 --> 00:13:28,839 Speaker 1: new ones can be issued by the city and then 236 00:13:28,880 --> 00:13:33,680 Speaker 1: auctioned off by regional authorities to potential taxi cab operators. 237 00:13:33,720 --> 00:13:36,720 Speaker 1: But the limited number means there's a hard cap on 238 00:13:36,800 --> 00:13:39,160 Speaker 1: the number of cars that are licensed to operate as 239 00:13:39,200 --> 00:13:41,560 Speaker 1: taxi cabs. This is a model that a lot of 240 00:13:41,600 --> 00:13:45,000 Speaker 1: other cities have followed. This makes it easier to regulate 241 00:13:45,040 --> 00:13:49,119 Speaker 1: the taxi industry and to try and affect other connected 242 00:13:49,200 --> 00:13:53,320 Speaker 1: issues like traffic congestion or pollution and more. Means that 243 00:13:53,640 --> 00:13:56,239 Speaker 1: if you limit the number of cars that can be taxis, 244 00:13:56,679 --> 00:13:59,840 Speaker 1: then you don't have to worry as much about taxis 245 00:14:00,000 --> 00:14:02,840 Speaker 1: fluttering up city streets and generating a lot of pollution. 246 00:14:02,920 --> 00:14:06,080 Speaker 1: But it also means people who might be fully qualified 247 00:14:06,200 --> 00:14:09,320 Speaker 1: and who might be genuinely awesome. Taxi cab drivers, if 248 00:14:09,320 --> 00:14:12,360 Speaker 1: they got the chance, can't break into the system because 249 00:14:12,360 --> 00:14:15,439 Speaker 1: they can't get a medallion. Now, there are other requirements 250 00:14:15,480 --> 00:14:17,440 Speaker 1: that some cities have that make it even harder to 251 00:14:17,440 --> 00:14:20,400 Speaker 1: become a driver. So, for instance, to drive a black 252 00:14:20,480 --> 00:14:23,480 Speaker 1: cab in London, a driver must first show that they 253 00:14:23,560 --> 00:14:27,880 Speaker 1: possess the knowledge. That's an actual term. The knowledge means 254 00:14:27,920 --> 00:14:30,200 Speaker 1: that they know the layout of all the city streets 255 00:14:30,200 --> 00:14:33,760 Speaker 1: in London and essentially that they can get anywhere from 256 00:14:33,800 --> 00:14:38,640 Speaker 1: anywhere without the use of a GPS. So that's impressive 257 00:14:38,680 --> 00:14:40,400 Speaker 1: and it usually takes a couple of years and it's 258 00:14:40,440 --> 00:14:43,760 Speaker 1: another big barrier to entry. But see here the app 259 00:14:43,880 --> 00:14:47,320 Speaker 1: version side steps all that right because you have a 260 00:14:47,360 --> 00:14:51,160 Speaker 1: GPS with the app, And in addition, passengers can assign 261 00:14:51,200 --> 00:14:54,680 Speaker 1: a rating to their driver, which can let future passengers 262 00:14:54,680 --> 00:14:57,120 Speaker 1: know if that driver is someone they want to ride with. 263 00:14:57,440 --> 00:14:59,640 Speaker 1: You can also tell the service if a driver is 264 00:14:59,680 --> 00:15:02,000 Speaker 1: being a problem and that person can be removed from 265 00:15:02,040 --> 00:15:05,800 Speaker 1: the loop entirely. Drivers can also rate passengers, which has 266 00:15:05,840 --> 00:15:09,120 Speaker 1: a similar effect, but behind the scenes. So in other words, 267 00:15:09,760 --> 00:15:13,040 Speaker 1: the promise of the service is to eliminate many of 268 00:15:13,080 --> 00:15:18,119 Speaker 1: the frustrations and concerns associated with the entrenched taxi industry. 269 00:15:18,200 --> 00:15:22,720 Speaker 1: It disrupts it. The company positions the app to be disruptive. 270 00:15:22,760 --> 00:15:26,440 Speaker 1: It's taking aim and an antiquated system by the argument 271 00:15:26,440 --> 00:15:29,680 Speaker 1: of the app that a lot of people find inconvenient 272 00:15:29,840 --> 00:15:34,600 Speaker 1: or irritating or maybe even predatory. It democratizes the service 273 00:15:34,720 --> 00:15:39,320 Speaker 1: across a wide range of drivers. So what's not to love. Well, 274 00:15:40,200 --> 00:15:43,200 Speaker 1: the taxi drivers don't love it. They've gone through the 275 00:15:43,240 --> 00:15:46,840 Speaker 1: processes and overcome the hurdles to operate a cab legally, 276 00:15:47,400 --> 00:15:50,880 Speaker 1: and to get undercut by a quote unquote disruptive service 277 00:15:51,000 --> 00:15:54,280 Speaker 1: is a pretty big blow. On the positive side for customers, 278 00:15:54,600 --> 00:15:56,360 Speaker 1: it is meant that a lot of taxi companies have 279 00:15:56,400 --> 00:15:59,920 Speaker 1: adopted many of the features found in apps like Uber, 280 00:16:00,360 --> 00:16:03,240 Speaker 1: such as using an app to hail a ride and 281 00:16:03,480 --> 00:16:05,720 Speaker 1: seeing where a driver is in relation to where you 282 00:16:05,760 --> 00:16:08,160 Speaker 1: are on the app, and tracking your trip in real 283 00:16:08,240 --> 00:16:11,640 Speaker 1: time in the vehicle, things that make people feel better 284 00:16:11,680 --> 00:16:14,240 Speaker 1: about taking a taxi. You could argue a lot of 285 00:16:14,240 --> 00:16:17,960 Speaker 1: those things only exist because the competition from services like 286 00:16:18,080 --> 00:16:22,120 Speaker 1: Uber forced the hands of taxi companies to adopt them, 287 00:16:22,160 --> 00:16:24,560 Speaker 1: and we should also remember that some of the regulations 288 00:16:24,560 --> 00:16:27,920 Speaker 1: in place, they aren't just red tape. That's not just 289 00:16:28,000 --> 00:16:32,400 Speaker 1: bureaucracy for bureaucracy's sake. Some are genuinely intended to ensure 290 00:16:32,440 --> 00:16:35,320 Speaker 1: passenger safety and to act as a control mechanism for 291 00:16:35,360 --> 00:16:38,640 Speaker 1: traffic congestion and pollution and stuff. The entry of an 292 00:16:38,720 --> 00:16:44,080 Speaker 1: unregulated fleet of drivers behaving like taxi cab operators throws 293 00:16:44,160 --> 00:16:47,320 Speaker 1: all of that into the garbage. But more germaine to 294 00:16:47,600 --> 00:16:52,120 Speaker 1: this discussion is that the revenue model just isn't working. 295 00:16:52,680 --> 00:16:57,440 Speaker 1: Uber loses money, a lot of money. In the second 296 00:16:57,520 --> 00:17:01,560 Speaker 1: quarter of two thousand nineteen, Uber reported revenues of three 297 00:17:01,680 --> 00:17:06,760 Speaker 1: point one seven billion dollars. That's billion with a B. Now, 298 00:17:06,800 --> 00:17:10,879 Speaker 1: that's most assuredly a princely sum. Heck might bump that 299 00:17:11,000 --> 00:17:14,560 Speaker 1: up to an imperial sum. However, it's not as much 300 00:17:14,600 --> 00:17:18,280 Speaker 1: money as the company lost in that same quarter. So 301 00:17:18,400 --> 00:17:23,040 Speaker 1: while they made three billion bucks, the company posted losses 302 00:17:23,080 --> 00:17:28,520 Speaker 1: to the tune of five point two four billion dollars. Yawsa. 303 00:17:28,720 --> 00:17:32,480 Speaker 1: So they are losing money way faster than they are 304 00:17:32,560 --> 00:17:35,760 Speaker 1: making money now. To be fair, according to Uber, part 305 00:17:35,800 --> 00:17:38,560 Speaker 1: of what made the losses so big that quarter was 306 00:17:38,640 --> 00:17:41,760 Speaker 1: that the company was buying backstocks from employees as part 307 00:17:41,800 --> 00:17:44,479 Speaker 1: of a compensation plan after Uber went public with an 308 00:17:44,480 --> 00:17:47,760 Speaker 1: I p O. But analysts said, even if you took 309 00:17:47,760 --> 00:17:50,840 Speaker 1: that out of consideration, the company still lost one point 310 00:17:50,920 --> 00:17:53,800 Speaker 1: three billion dollars that quarter, and that it was a 311 00:17:53,880 --> 00:17:58,080 Speaker 1: thirty percent increase in losses from the quarter before. That's 312 00:17:58,119 --> 00:18:02,120 Speaker 1: not a great story. It's a downding amount of money. Now, 313 00:18:03,080 --> 00:18:06,360 Speaker 1: speaking of money, we need to earn a little ourselves. 314 00:18:06,600 --> 00:18:09,159 Speaker 1: So we're going to take a quick break. When I 315 00:18:09,200 --> 00:18:12,119 Speaker 1: come back, I'll talk more about uber strategy and the 316 00:18:12,240 --> 00:18:23,960 Speaker 1: challenges the company faces. Right, I'm back. So, how the 317 00:18:24,000 --> 00:18:27,440 Speaker 1: heck can Uber stay in business if it costs more 318 00:18:27,480 --> 00:18:31,080 Speaker 1: to operate then the company can generate in revenue. Well, 319 00:18:31,560 --> 00:18:33,639 Speaker 1: I'm glad you asked, because this is where we get 320 00:18:33,680 --> 00:18:36,240 Speaker 1: into some really messed up stuff about fake it until 321 00:18:36,280 --> 00:18:39,160 Speaker 1: you make it. So Uber has managed to keep going 322 00:18:39,640 --> 00:18:44,120 Speaker 1: mainly through getting investments into the company. More money gets 323 00:18:44,160 --> 00:18:47,199 Speaker 1: poured into Uber by people who are hoping to receive 324 00:18:47,240 --> 00:18:49,920 Speaker 1: a big payout in the future, or there are people 325 00:18:49,920 --> 00:18:53,040 Speaker 1: who hope to guide the company by essentially purchasing enough 326 00:18:53,119 --> 00:18:56,000 Speaker 1: voting shares to make a big impact. A question that 327 00:18:56,080 --> 00:19:00,240 Speaker 1: naturally arises with this revelation is how long can at 328 00:19:00,320 --> 00:19:03,640 Speaker 1: keep going on? How long will it be before investors 329 00:19:03,720 --> 00:19:06,280 Speaker 1: worry that the money they're putting into the company is 330 00:19:06,400 --> 00:19:08,760 Speaker 1: never going to come back to them. Because if that 331 00:19:08,880 --> 00:19:12,040 Speaker 1: day should come and Uber still can't operate as a 332 00:19:12,040 --> 00:19:16,000 Speaker 1: profitable business, the company is doomed because it will eventually 333 00:19:16,040 --> 00:19:18,240 Speaker 1: burn through all the money it has and it will 334 00:19:18,280 --> 00:19:21,000 Speaker 1: have to fold. And by the way, while I'm talking 335 00:19:21,000 --> 00:19:24,800 Speaker 1: specifically about Uber, no right hailing service out there has 336 00:19:24,800 --> 00:19:27,400 Speaker 1: proven to be profitable yet it's just Uber has been 337 00:19:27,640 --> 00:19:32,880 Speaker 1: spectacularly unprofitable. So one path Uber might try and take 338 00:19:33,040 --> 00:19:36,040 Speaker 1: is to dominate the market right swoop into a region, 339 00:19:36,520 --> 00:19:42,080 Speaker 1: undercut competitors, gain customers, build customer loyalty, and then when 340 00:19:42,080 --> 00:19:46,560 Speaker 1: competition has been starved out because Uber is undercutting everybody else, 341 00:19:47,080 --> 00:19:50,040 Speaker 1: then you can hike up prices so that the company 342 00:19:50,119 --> 00:19:52,879 Speaker 1: is making money on a per ride basis instead of 343 00:19:53,000 --> 00:19:57,120 Speaker 1: losing money. That might be what has guided some pretty 344 00:19:57,200 --> 00:20:00,760 Speaker 1: darn cutthroat maneuvers on Uber's part in the past, but 345 00:20:01,240 --> 00:20:04,040 Speaker 1: really it's a race against the threat of bankruptcy, whether 346 00:20:04,119 --> 00:20:08,120 Speaker 1: or not you can do enough to defeat your competition 347 00:20:08,440 --> 00:20:10,960 Speaker 1: and become the only game in town before you run 348 00:20:10,960 --> 00:20:13,600 Speaker 1: out of money. Another path is for Uber to get 349 00:20:13,680 --> 00:20:16,719 Speaker 1: involved in a lot more segments of the transportation sector, 350 00:20:17,000 --> 00:20:19,720 Speaker 1: which is stuff we've been seeing recently, and stuff with 351 00:20:19,760 --> 00:20:22,080 Speaker 1: like a food delivery. But there are a ton of 352 00:20:22,119 --> 00:20:25,240 Speaker 1: competing companies in those spaces too, which makes it really 353 00:20:25,320 --> 00:20:28,040 Speaker 1: hard for any one company to dominate the market, let 354 00:20:28,119 --> 00:20:32,280 Speaker 1: alone and industry. So while we're left with is a 355 00:20:32,280 --> 00:20:36,440 Speaker 1: company that's trying to stay ahead of existential threats while 356 00:20:36,600 --> 00:20:40,439 Speaker 1: establishing a profitable business model. And the technology side works. 357 00:20:41,000 --> 00:20:44,000 Speaker 1: The apps function as they are meant to, They match 358 00:20:44,080 --> 00:20:47,800 Speaker 1: up drivers and writers, they facilitate payments, but the business 359 00:20:47,840 --> 00:20:51,520 Speaker 1: model underneath it is flawed. I don't think anyone is 360 00:20:51,600 --> 00:20:54,320 Speaker 1: questioning how services like Uber can be useful to the 361 00:20:54,400 --> 00:20:58,840 Speaker 1: end customer, but the other issues stuff like underpaid drivers 362 00:20:58,880 --> 00:21:01,560 Speaker 1: who struggled to be wreck ignized as employees at all, 363 00:21:02,240 --> 00:21:06,680 Speaker 1: traffic pollution, safety concerns, or there was a recent story 364 00:21:06,720 --> 00:21:10,240 Speaker 1: about Uber in London about how customers had been matched 365 00:21:10,320 --> 00:21:13,120 Speaker 1: up with a driver only to have a totally different 366 00:21:13,200 --> 00:21:17,960 Speaker 1: driver be the one to pick them up fourteen thousand times. 367 00:21:18,480 --> 00:21:20,399 Speaker 1: That ain't great if you're hoping to be sure that 368 00:21:20,440 --> 00:21:23,600 Speaker 1: the person who's picking you up has a good rating. Anyway, 369 00:21:23,840 --> 00:21:27,040 Speaker 1: these things raise a lot of red flags. Meanwhile, Uber 370 00:21:27,080 --> 00:21:30,399 Speaker 1: and other ride hailing companies keep making aggressive moves in 371 00:21:30,440 --> 00:21:33,359 Speaker 1: an effort to build a sturdy foundation, and no one's 372 00:21:33,720 --> 00:21:38,200 Speaker 1: totally sure if they can actually do it, so they're 373 00:21:38,200 --> 00:21:42,000 Speaker 1: faking it until they make it or until it breaks them. 374 00:21:42,040 --> 00:21:44,840 Speaker 1: So how about we transition over to a quick rundown 375 00:21:45,000 --> 00:21:49,760 Speaker 1: of a different event, a true event in that it 376 00:21:49,880 --> 00:21:53,960 Speaker 1: was eventful. I'm talking about the Fire Festival, which made 377 00:21:53,960 --> 00:21:57,639 Speaker 1: headlines in two thousand seventeen. So again, depending upon the 378 00:21:57,680 --> 00:22:01,160 Speaker 1: account you believe, the Fire Festival was they're a sincere 379 00:22:01,200 --> 00:22:04,919 Speaker 1: attempt to throw a really luxurious music festival on an 380 00:22:05,000 --> 00:22:08,359 Speaker 1: island in the Bahamas, or it was a total money 381 00:22:08,400 --> 00:22:12,000 Speaker 1: making scam from the beginning. Now, the pitch was that 382 00:22:12,119 --> 00:22:16,679 Speaker 1: attendees would get a truly first rate experience with astounding 383 00:22:16,720 --> 00:22:20,120 Speaker 1: accommodations like the stuff you would see in travel magazines, 384 00:22:20,600 --> 00:22:23,800 Speaker 1: and the festival would feature top notch talent and enough 385 00:22:24,119 --> 00:22:28,000 Speaker 1: Instagram were the experiences to propel even the most modest 386 00:22:28,200 --> 00:22:34,000 Speaker 1: social media socialite into total influencer status, or again, it 387 00:22:34,040 --> 00:22:36,160 Speaker 1: was just a scam from the very beginning. Now, personally, 388 00:22:36,200 --> 00:22:38,240 Speaker 1: I'm more inclined to think that it was something that 389 00:22:38,280 --> 00:22:40,760 Speaker 1: a few folks were convinced they would be able to 390 00:22:40,800 --> 00:22:44,680 Speaker 1: do because they had no appreciation of their own limitations 391 00:22:45,000 --> 00:22:47,920 Speaker 1: nor of the magnitude of the task they had set 392 00:22:47,960 --> 00:22:51,960 Speaker 1: out for themselves. So they overestimated their own abilities and 393 00:22:51,960 --> 00:22:55,280 Speaker 1: they underestimated how much work it would take to pull 394 00:22:55,359 --> 00:22:57,679 Speaker 1: something like this off. Now, there are a couple of 395 00:22:57,720 --> 00:23:01,400 Speaker 1: documentaries about the whole fiasco, and they're well worth watching. 396 00:23:01,680 --> 00:23:03,720 Speaker 1: And I'm not going to go through all of it here, 397 00:23:03,800 --> 00:23:06,080 Speaker 1: because they did a great job of it. You should 398 00:23:06,119 --> 00:23:09,400 Speaker 1: go see those documentaries. But basically, a guy named Billy 399 00:23:09,480 --> 00:23:12,040 Speaker 1: McFarland and some of his associates came up with this 400 00:23:12,160 --> 00:23:16,080 Speaker 1: concept and they identified things that young, affluent people would 401 00:23:16,080 --> 00:23:19,720 Speaker 1: find really appealing. They really knew which buttons to push 402 00:23:20,119 --> 00:23:24,360 Speaker 1: to get people excited. Uh. Namely, they aimed at stuff 403 00:23:24,440 --> 00:23:29,760 Speaker 1: that millennials tend to value. And yes, these are gross generalizations, 404 00:23:30,080 --> 00:23:32,240 Speaker 1: and I do not mean to suggest that everyone who 405 00:23:32,280 --> 00:23:35,639 Speaker 1: falls into the age range of millennial feels the same way. 406 00:23:35,880 --> 00:23:39,120 Speaker 1: And to be more precise, these guys were specifically targeting 407 00:23:39,240 --> 00:23:43,080 Speaker 1: wealthy millennials in particular, So here are some of the 408 00:23:43,080 --> 00:23:48,160 Speaker 1: things they identified as being important. These young people really 409 00:23:48,320 --> 00:23:53,760 Speaker 1: value experiences, so crafting and experience would tap into this 410 00:23:53,880 --> 00:23:57,560 Speaker 1: millennial desire to be part of something unique or special. 411 00:23:57,960 --> 00:23:59,920 Speaker 1: So not only did it have to be an experience, 412 00:24:00,119 --> 00:24:05,120 Speaker 1: but exclusivity was an important concept. Millennials that they were 413 00:24:05,160 --> 00:24:07,479 Speaker 1: targeting really like to feel that they're part of an 414 00:24:07,480 --> 00:24:11,040 Speaker 1: exclusive group that get to experience something that not everyone 415 00:24:11,080 --> 00:24:13,400 Speaker 1: else gets to do. And on top of that, these 416 00:24:13,440 --> 00:24:17,560 Speaker 1: millennials valued the appearance of having an amazing experience. In fact, 417 00:24:17,600 --> 00:24:20,440 Speaker 1: you could argue the appearance of having an amazing experience 418 00:24:20,920 --> 00:24:24,200 Speaker 1: is the most important part of it, not the experience itself. 419 00:24:24,520 --> 00:24:28,280 Speaker 1: And here's where we get on a Jonathan rant. So 420 00:24:29,000 --> 00:24:32,320 Speaker 1: what I mean by the appearance of an experience is 421 00:24:32,359 --> 00:24:35,080 Speaker 1: that there's a lot of value placed in the perception 422 00:24:35,560 --> 00:24:39,520 Speaker 1: of a person as framed by their social media presence. 423 00:24:39,800 --> 00:24:42,600 Speaker 1: And hey, I'm subject to this too, I'm not immune. 424 00:24:42,880 --> 00:24:45,760 Speaker 1: If I take five selfies of me standing in front 425 00:24:45,760 --> 00:24:48,399 Speaker 1: of like a statue or something, I'm gonna pick the 426 00:24:48,440 --> 00:24:50,280 Speaker 1: one that I think is the best to share with 427 00:24:50,359 --> 00:24:52,679 Speaker 1: social I'll probably skip the ones where I'm in the 428 00:24:52,680 --> 00:24:56,080 Speaker 1: middle of a sneeze. Or something. Though honestly, that sounds 429 00:24:56,160 --> 00:24:59,240 Speaker 1: like it's way more on brand for me, So maybe 430 00:24:59,240 --> 00:25:01,479 Speaker 1: I would, and I'll why I hate using the phrase 431 00:25:01,600 --> 00:25:06,280 Speaker 1: on brand for me. It's terrible anyway. In this sense, 432 00:25:06,320 --> 00:25:09,760 Speaker 1: an experience becomes more like a backdrop for an amazing 433 00:25:09,880 --> 00:25:14,040 Speaker 1: video or an amazing selfie. The goal is to convey 434 00:25:14,080 --> 00:25:16,879 Speaker 1: that the millennial is in the middle of something truly 435 00:25:16,960 --> 00:25:20,800 Speaker 1: special and incredible. It doesn't necessarily have to be incredible, 436 00:25:21,119 --> 00:25:24,560 Speaker 1: it just has to look incredible. And there have been 437 00:25:24,600 --> 00:25:28,359 Speaker 1: a ton of folks who have created installations like pop 438 00:25:28,440 --> 00:25:32,600 Speaker 1: up experiences just for this purpose. This is stuff that's 439 00:25:32,600 --> 00:25:36,000 Speaker 1: all meant to be a backdrop for selfies. These installations 440 00:25:36,040 --> 00:25:40,720 Speaker 1: aren't necessarily an experience in of themselves, as in, there'd 441 00:25:40,760 --> 00:25:43,159 Speaker 1: be little point in going through them if you weren't 442 00:25:43,160 --> 00:25:46,679 Speaker 1: taking a camera with yourself and taking photos every three feet. 443 00:25:47,040 --> 00:25:50,520 Speaker 1: They offer nothing more than that. And so really, what 444 00:25:50,720 --> 00:25:53,479 Speaker 1: is happening is that the millennials are creating a visual 445 00:25:53,600 --> 00:25:57,400 Speaker 1: record of them going through an overall empty and meaningless 446 00:25:57,440 --> 00:26:00,280 Speaker 1: experience in order to give off the appearance of something more. 447 00:26:01,720 --> 00:26:05,800 Speaker 1: I don't know, more and more, you know, I see 448 00:26:05,840 --> 00:26:08,600 Speaker 1: these pop up museums that cater to this all the time, 449 00:26:09,040 --> 00:26:12,000 Speaker 1: and hey, I'm not saying there's anything wrong with taking 450 00:26:12,000 --> 00:26:15,000 Speaker 1: a pretty photograph or an amazing selfie. I think that's 451 00:26:15,000 --> 00:26:19,040 Speaker 1: pretty awesome. But there's no real differentiation in these pop 452 00:26:19,160 --> 00:26:25,320 Speaker 1: up things between artificial photography backdrops and actual real experiences. 453 00:26:25,359 --> 00:26:29,000 Speaker 1: They're equating the two, so that kind of cheapens the 454 00:26:29,080 --> 00:26:32,400 Speaker 1: value of a real experience. To me, at least, most 455 00:26:32,440 --> 00:26:35,120 Speaker 1: of these pop up museums would be entirely forgettable if 456 00:26:35,160 --> 00:26:37,720 Speaker 1: not for the images and video captured in the place. 457 00:26:38,000 --> 00:26:40,160 Speaker 1: So in other words, if you were to walk through 458 00:26:40,160 --> 00:26:43,040 Speaker 1: one without a camera, you would walk out having felt 459 00:26:43,040 --> 00:26:45,480 Speaker 1: no real impact of that, and within a couple of 460 00:26:45,520 --> 00:26:48,000 Speaker 1: days you probably wouldn't even think about it ever. Again, 461 00:26:48,520 --> 00:26:51,080 Speaker 1: compare that to an experience where you develop a deep 462 00:26:51,160 --> 00:26:55,800 Speaker 1: emotional or intellectual connection with something and experience that you 463 00:26:55,880 --> 00:26:58,320 Speaker 1: might talk about for years to come because the way 464 00:26:58,359 --> 00:27:00,800 Speaker 1: it affected you. That's a big difference. But in the 465 00:27:00,840 --> 00:27:05,960 Speaker 1: world of social media, they end up being treated the same. Okay, So, 466 00:27:06,480 --> 00:27:10,760 Speaker 1: knowing that these rich kids are super image conscious and 467 00:27:10,920 --> 00:27:15,760 Speaker 1: experience oriented and really eager to be part of exclusive 468 00:27:16,640 --> 00:27:20,320 Speaker 1: clubs and groups, McFarland and his partners began to make 469 00:27:20,359 --> 00:27:23,760 Speaker 1: some grandiose promises. Now my guess is they figured they'd 470 00:27:23,760 --> 00:27:26,399 Speaker 1: make enough money to actually pull off the event. They 471 00:27:26,400 --> 00:27:30,360 Speaker 1: were describing that if you just wanted it badly enough right, 472 00:27:30,520 --> 00:27:32,639 Speaker 1: things would just fall into place. It was kind of 473 00:27:32,680 --> 00:27:34,560 Speaker 1: like the secret you put it on the universe, it's 474 00:27:34,560 --> 00:27:36,679 Speaker 1: going to come back to you. Well, that's sort of 475 00:27:36,680 --> 00:27:40,320 Speaker 1: wishful thinking can really set you up for massive problems, 476 00:27:40,359 --> 00:27:44,480 Speaker 1: and McFarland found that out the hard way. McFarland starts 477 00:27:44,480 --> 00:27:48,080 Speaker 1: getting massive interest in his festival and that he says 478 00:27:48,119 --> 00:27:51,240 Speaker 1: he's going to throw and orders start pouring in, people 479 00:27:51,280 --> 00:27:55,000 Speaker 1: start buying up tickets and booking up flights. But it 480 00:27:55,080 --> 00:27:58,200 Speaker 1: seems as though no one had actually done a real 481 00:27:58,400 --> 00:28:02,000 Speaker 1: honest assessment of what would take to actually put this 482 00:28:02,080 --> 00:28:06,600 Speaker 1: event together. Heck, even something as important as selecting the 483 00:28:06,680 --> 00:28:10,639 Speaker 1: site didn't really happen until after the pitch had already 484 00:28:10,680 --> 00:28:13,960 Speaker 1: gone out. The initial site that McFarland had selected didn't 485 00:28:14,000 --> 00:28:17,879 Speaker 1: work out. The story about why varies from person to person, 486 00:28:17,920 --> 00:28:20,280 Speaker 1: but it didn't work out. So for a while, the 487 00:28:20,320 --> 00:28:23,440 Speaker 1: festival was being promoted, but there wasn't actually a place 488 00:28:23,480 --> 00:28:25,720 Speaker 1: for it to happen yet. So they were scrambling to 489 00:28:25,760 --> 00:28:28,600 Speaker 1: find a suitable location for it. This is like saying, 490 00:28:28,920 --> 00:28:31,560 Speaker 1: wouldn't it be cool to have a big music festival 491 00:28:31,600 --> 00:28:35,120 Speaker 1: with huge stars performing in front of crystal blue ocean 492 00:28:35,160 --> 00:28:38,480 Speaker 1: water on white sand beaches, and you've got a luxury 493 00:28:38,560 --> 00:28:40,480 Speaker 1: villa to go back to after you're done partying for 494 00:28:40,520 --> 00:28:43,080 Speaker 1: the night. Well, the answer to that would be heck, yeah, 495 00:28:43,080 --> 00:28:47,120 Speaker 1: I'd be amazing. But just because something would be amazing 496 00:28:47,640 --> 00:28:51,320 Speaker 1: doesn't make mean that it's a possibility. That's the important part. 497 00:28:52,200 --> 00:28:54,120 Speaker 1: So where's the tech angle in this story? Why am 498 00:28:54,120 --> 00:28:56,760 Speaker 1: I even bringing up Well, part of the reason for 499 00:28:56,840 --> 00:28:59,720 Speaker 1: the Fire Festival was to serve as a big advertising 500 00:28:59,760 --> 00:29:02,960 Speaker 1: camp pain for an app that McFarland's company was working on. 501 00:29:03,160 --> 00:29:06,120 Speaker 1: It was also called Fire. The app was meant to 502 00:29:06,120 --> 00:29:11,280 Speaker 1: help people book entertainment for events, like big name entertainers. 503 00:29:11,320 --> 00:29:14,880 Speaker 1: So in theory, if you were organizing an event, you 504 00:29:14,920 --> 00:29:18,080 Speaker 1: could choose a few different entertainers that who had registered 505 00:29:18,080 --> 00:29:20,880 Speaker 1: with this app, and you would pitch it to them 506 00:29:20,880 --> 00:29:22,640 Speaker 1: and see if they had any interest in being part 507 00:29:22,640 --> 00:29:25,440 Speaker 1: of it. Then the entertainers could use the app and 508 00:29:25,520 --> 00:29:28,200 Speaker 1: look at the various pitches coming in and decide whether 509 00:29:28,280 --> 00:29:31,840 Speaker 1: or not they wanted to go any further. Presumably Fire 510 00:29:31,880 --> 00:29:35,040 Speaker 1: would make money once the two parties came together in 511 00:29:35,160 --> 00:29:37,480 Speaker 1: some form of agreement. Now, I guess you could think 512 00:29:37,520 --> 00:29:40,560 Speaker 1: of it as tender, but for booking bands to play 513 00:29:40,600 --> 00:29:45,040 Speaker 1: bar Mitzvah's or whatever. More importantly, the story illustrates that 514 00:29:45,760 --> 00:29:48,640 Speaker 1: fake it until you make it can be truly destructive. 515 00:29:49,160 --> 00:29:52,280 Speaker 1: McFarland and his associates were playing a shell game. They 516 00:29:52,320 --> 00:29:55,080 Speaker 1: were moving money around like crazy in an effort to 517 00:29:55,240 --> 00:29:58,920 Speaker 1: just stay ahead of total disaster. But unlike a company 518 00:29:58,960 --> 00:30:03,240 Speaker 1: like Uber, McFarland had an actual deadline where stuff either 519 00:30:03,440 --> 00:30:06,240 Speaker 1: had to come together or the whole thing was gonna 520 00:30:06,280 --> 00:30:10,960 Speaker 1: go bust. Uber's deadline is undefined. It's just whenever the 521 00:30:11,000 --> 00:30:14,520 Speaker 1: money runs out. If it ever does run out, McFarland 522 00:30:14,640 --> 00:30:18,240 Speaker 1: had a date associated with the festival and things did 523 00:30:18,280 --> 00:30:21,240 Speaker 1: not come together. This was I fake it until you 524 00:30:21,280 --> 00:30:24,400 Speaker 1: break it situation. So in case you didn't know, the 525 00:30:24,600 --> 00:30:28,360 Speaker 1: entire festival was a total disaster. Musical artists who were 526 00:30:28,400 --> 00:30:32,160 Speaker 1: announced for the festival canceled. At least one act claimed 527 00:30:32,200 --> 00:30:34,840 Speaker 1: that there never was an agreement to actually appear at 528 00:30:34,840 --> 00:30:37,240 Speaker 1: the festival in the first place, that nothing was ever 529 00:30:37,280 --> 00:30:39,600 Speaker 1: signed and that they were being promoted as being part 530 00:30:39,600 --> 00:30:43,080 Speaker 1: of this festival without an actual signed agreement in place. 531 00:30:43,640 --> 00:30:47,200 Speaker 1: The site wasn't prepared for the arrival of hundreds of attendees. 532 00:30:47,600 --> 00:30:51,800 Speaker 1: There were inadequate toilet facilities, the food situation was dire, 533 00:30:52,160 --> 00:30:54,000 Speaker 1: and a lot of folks tried to head right back 534 00:30:54,040 --> 00:30:55,880 Speaker 1: to the airport to get a flight out as soon 535 00:30:55,960 --> 00:30:59,120 Speaker 1: as they learned about the conditions. It was beyond a 536 00:30:59,240 --> 00:31:02,760 Speaker 1: huge mess. Now, I think that actually ties back into 537 00:31:02,840 --> 00:31:06,680 Speaker 1: my rant about real experiences versus the appearance of experiences. 538 00:31:07,280 --> 00:31:10,320 Speaker 1: There's a strong impulse that we have to present a 539 00:31:10,320 --> 00:31:14,240 Speaker 1: particular vision of ourselves to the world through our social 540 00:31:14,280 --> 00:31:17,640 Speaker 1: media right because in real life, people can see us 541 00:31:17,760 --> 00:31:20,560 Speaker 1: for both our virtues and our flaws. They can see 542 00:31:20,640 --> 00:31:22,680 Speaker 1: us at our best, they can see us at our worst. 543 00:31:22,720 --> 00:31:25,880 Speaker 1: It's a raw feed, that's what real life is. But 544 00:31:25,960 --> 00:31:29,560 Speaker 1: with social media, we can craft that experience, we can 545 00:31:29,600 --> 00:31:32,880 Speaker 1: cultivate it. We can present to the world an image 546 00:31:32,880 --> 00:31:36,200 Speaker 1: of ourselves that reflects part of who we are, but 547 00:31:36,280 --> 00:31:38,560 Speaker 1: leaves out all the stuff we'd rather folks not notice. 548 00:31:38,600 --> 00:31:41,080 Speaker 1: We can be the person we want to be as 549 00:31:41,120 --> 00:31:44,000 Speaker 1: opposed to the person we actually are, so it allows 550 00:31:44,080 --> 00:31:48,239 Speaker 1: us to create a fantasy and present it as reality. 551 00:31:48,400 --> 00:31:50,920 Speaker 1: Fake it until you make it follows a similar line 552 00:31:50,920 --> 00:31:54,320 Speaker 1: of thought. You present the fantasy, in this case, your idea, 553 00:31:54,680 --> 00:31:57,920 Speaker 1: as if it were a reality. And sure, there may 554 00:31:57,920 --> 00:32:00,760 Speaker 1: be some hurdles between you and your goal, but those 555 00:32:00,800 --> 00:32:03,800 Speaker 1: aren't insurmountable. You'll you'll be able to get over them 556 00:32:03,880 --> 00:32:06,680 Speaker 1: right without too much trouble. Then you'll be sitting pretty 557 00:32:06,720 --> 00:32:09,520 Speaker 1: and more importantly, to your investors, they all get filthy 558 00:32:09,600 --> 00:32:12,960 Speaker 1: rich because man, it's such a good idea. Now, personally, 559 00:32:13,200 --> 00:32:15,200 Speaker 1: I find that to be a pretty toxic way of 560 00:32:15,320 --> 00:32:18,280 Speaker 1: looking at the world. It definitely doesn't set you up 561 00:32:18,320 --> 00:32:22,880 Speaker 1: for success. It creates an incredibly stressful environment, assuming you're 562 00:32:22,920 --> 00:32:25,760 Speaker 1: at all sincere with your wish to create something real. 563 00:32:26,080 --> 00:32:28,080 Speaker 1: I mean, I guess if you're on the prowl for 564 00:32:28,160 --> 00:32:31,040 Speaker 1: a mark, the only stress you have is that you 565 00:32:31,080 --> 00:32:33,239 Speaker 1: want to avoid getting caught out for as long as 566 00:32:33,280 --> 00:32:36,080 Speaker 1: you can. So if you're the dishonest type, you might 567 00:32:36,120 --> 00:32:39,120 Speaker 1: not sweat the pressure too much because you're never intended 568 00:32:39,160 --> 00:32:41,680 Speaker 1: to deliver upon your promise in the first place. But 569 00:32:43,080 --> 00:32:45,080 Speaker 1: if you are on the verge of getting into serious 570 00:32:45,160 --> 00:32:48,440 Speaker 1: legal trouble, you know, like McFarland did. You might start 571 00:32:48,440 --> 00:32:53,640 Speaker 1: feeling the pressure then, but wait, it gets worse. I'll 572 00:32:53,680 --> 00:33:03,600 Speaker 1: explain more after we take a quick break. All right, 573 00:33:03,680 --> 00:33:05,360 Speaker 1: So I talked about fake it until you make it 574 00:33:05,440 --> 00:33:09,200 Speaker 1: strategies with stuff like ride hailing companies and social events, 575 00:33:09,200 --> 00:33:11,320 Speaker 1: but it also applies to stuff like the dot com 576 00:33:11,360 --> 00:33:14,560 Speaker 1: bubble of two thousand and two thousand one. This is 577 00:33:14,560 --> 00:33:17,200 Speaker 1: what I was saying earlier about how this fake it 578 00:33:17,280 --> 00:33:21,040 Speaker 1: until you make it philosophy. It's not new, and it's 579 00:33:21,040 --> 00:33:23,520 Speaker 1: certainly not new in tech. We've seen it for a 580 00:33:23,560 --> 00:33:27,520 Speaker 1: long time, and I've covered the bubble in previous episodes. 581 00:33:27,560 --> 00:33:30,880 Speaker 1: But here's the really quick version. As more people became 582 00:33:30,920 --> 00:33:34,360 Speaker 1: aware that the Internet was a thing like the general 583 00:33:34,400 --> 00:33:37,840 Speaker 1: public that started to happen in the early to mid nineties. 584 00:33:37,880 --> 00:33:40,720 Speaker 1: People also recognize that there could be some legitimate use 585 00:33:40,760 --> 00:33:45,440 Speaker 1: cases for business online. The Internet would enable an unprecedented 586 00:33:45,520 --> 00:33:50,120 Speaker 1: explosion and goods and services. Online shopping was poised to 587 00:33:50,160 --> 00:33:53,840 Speaker 1: become the new norm, replacing old brick and mortar experiences entirely, 588 00:33:54,120 --> 00:33:57,840 Speaker 1: and tons of people wanted in on what appeared to 589 00:33:57,840 --> 00:34:01,600 Speaker 1: be a cash cow. The Internet was essentially the gold 590 00:34:01,680 --> 00:34:05,360 Speaker 1: Rush for the nineties. Everyone felt they needed to stake 591 00:34:05,400 --> 00:34:08,680 Speaker 1: acclaim there. Companies that were directly tied to the Internet, 592 00:34:08,719 --> 00:34:12,560 Speaker 1: like Netscape Communications Corporation would go public and they would 593 00:34:12,560 --> 00:34:16,960 Speaker 1: see their share prices skyrocket, and that made early investors 594 00:34:17,040 --> 00:34:19,440 Speaker 1: a ton of money. That just encouraged a lot of 595 00:34:19,480 --> 00:34:23,200 Speaker 1: people to take big risks and invest in various Internet 596 00:34:23,239 --> 00:34:27,400 Speaker 1: related companies because the payolts were so potentially huge that 597 00:34:27,480 --> 00:34:29,719 Speaker 1: it seemed like you would be missing out if you 598 00:34:29,760 --> 00:34:32,440 Speaker 1: didn't get in on the ground floor and invest in 599 00:34:32,520 --> 00:34:35,719 Speaker 1: some of these startups. And looking at some companies, you 600 00:34:35,760 --> 00:34:39,120 Speaker 1: could see how there was a very compelling motivation behind that. 601 00:34:39,160 --> 00:34:41,839 Speaker 1: I mean, if you had bought Apple stock when it 602 00:34:41,880 --> 00:34:44,680 Speaker 1: was at its lowest, you'd be a you know you 603 00:34:44,680 --> 00:34:47,359 Speaker 1: you'd see a truly massive return on that investment if 604 00:34:47,360 --> 00:34:49,640 Speaker 1: you had held onto it till today. And greed is 605 00:34:49,640 --> 00:34:52,759 Speaker 1: a very powerful motivator. So you had a ton of 606 00:34:52,880 --> 00:34:56,760 Speaker 1: entrepreneurs starting up dot com businesses, You had a bunch 607 00:34:56,760 --> 00:34:59,399 Speaker 1: of investors eager to back the horse that would pull 608 00:34:59,400 --> 00:35:02,560 Speaker 1: in those law shot odds. That set the ground for 609 00:35:02,800 --> 00:35:07,080 Speaker 1: rampant speculation as people just poured way too much money 610 00:35:07,160 --> 00:35:10,360 Speaker 1: into these startup companies. Many of these companies had not 611 00:35:10,520 --> 00:35:14,600 Speaker 1: yet formulated a business plan that could lead to profitable operation. 612 00:35:14,880 --> 00:35:16,839 Speaker 1: In fact, I suspect more than a few of them 613 00:35:17,000 --> 00:35:19,879 Speaker 1: didn't have any real business plan to speak of. They 614 00:35:19,920 --> 00:35:22,520 Speaker 1: just had an idea of how to use the Internet, 615 00:35:22,760 --> 00:35:25,279 Speaker 1: which may or may not have had any merit. Some 616 00:35:25,360 --> 00:35:27,879 Speaker 1: were geared towards a compelling idea, but had no real 617 00:35:27,920 --> 00:35:31,239 Speaker 1: way to monetize that idea. Much of the dot com 618 00:35:31,360 --> 00:35:35,120 Speaker 1: industry was firmly in the fake it until you make 619 00:35:35,160 --> 00:35:38,680 Speaker 1: it camp. I think, generally speaking, that most of the 620 00:35:38,840 --> 00:35:42,680 Speaker 1: entrepreneurs really believed that those initial investments would propel the 621 00:35:42,719 --> 00:35:45,680 Speaker 1: start up with such momentum that it would overcome any 622 00:35:45,800 --> 00:35:48,840 Speaker 1: challenges in the way and then establish itself as a 623 00:35:48,920 --> 00:35:52,799 Speaker 1: legitimate business. Of course, some others were more concerned with 624 00:35:52,960 --> 00:35:56,719 Speaker 1: spending that sweet venture capital on stuff like swanky offices 625 00:35:56,760 --> 00:36:00,560 Speaker 1: and luxuries. Again, it was like it was the appearance 626 00:36:00,840 --> 00:36:03,920 Speaker 1: of running a business was good enough to you know, 627 00:36:04,080 --> 00:36:06,240 Speaker 1: run a business like. It didn't matter if you actually 628 00:36:06,280 --> 00:36:08,080 Speaker 1: knew how to do it. You just had to look 629 00:36:08,120 --> 00:36:09,800 Speaker 1: like you knew how to do it, and then everything 630 00:36:09,800 --> 00:36:14,280 Speaker 1: would work itself out. A very naive approach. Now, since 631 00:36:14,320 --> 00:36:17,840 Speaker 1: many of these companies had big overhead costs and a 632 00:36:17,880 --> 00:36:20,000 Speaker 1: limited means of generating revenue. I mean a lot of 633 00:36:20,000 --> 00:36:24,080 Speaker 1: these companies would end up having warehouse space, which is 634 00:36:24,320 --> 00:36:27,440 Speaker 1: an ongoing expense you have to pay to stay in business, 635 00:36:27,880 --> 00:36:31,000 Speaker 1: but would have a very poor revenue model. Well that's 636 00:36:31,000 --> 00:36:33,839 Speaker 1: not something you can sustain forever. They were burning through 637 00:36:33,880 --> 00:36:37,759 Speaker 1: money really fast. Now, it wasn't uncommon around this time 638 00:36:37,760 --> 00:36:40,120 Speaker 1: for employees to get a lot of their compensation in 639 00:36:40,120 --> 00:36:42,799 Speaker 1: the form of company shares. The idea was that the 640 00:36:42,800 --> 00:36:46,000 Speaker 1: company would establish itself and become successful and the people 641 00:36:46,120 --> 00:36:50,400 Speaker 1: responsible for doing the work would get rewarded, which sounds great, 642 00:36:50,760 --> 00:36:54,560 Speaker 1: but that premise depends upon the company being successful. If 643 00:36:54,600 --> 00:36:57,279 Speaker 1: it's not, then you have employees who are left with 644 00:36:57,360 --> 00:37:00,400 Speaker 1: stock that isn't worth the paper it's printed on, or 645 00:37:00,520 --> 00:37:03,319 Speaker 1: the storage space it occupies if it's all digital. A 646 00:37:03,400 --> 00:37:08,480 Speaker 1: combination of factors led to a failure in confidence among investors, 647 00:37:08,560 --> 00:37:11,239 Speaker 1: and soon the dot com industry was in free fall 648 00:37:11,320 --> 00:37:14,120 Speaker 1: as everyone was pulling their money out, Some companies, like 649 00:37:14,200 --> 00:37:17,800 Speaker 1: Amazon were able to survive through good luck and good timing. 650 00:37:17,920 --> 00:37:21,040 Speaker 1: Amazon had managed to secure a very large investment not 651 00:37:21,200 --> 00:37:24,400 Speaker 1: long before the market tanked, and through that investment they 652 00:37:24,400 --> 00:37:26,239 Speaker 1: were able to ride it out, but a lot of 653 00:37:26,280 --> 00:37:30,200 Speaker 1: companies withered away entirely and the economy overall suffered as 654 00:37:30,200 --> 00:37:33,759 Speaker 1: a result. For a more recent example of fake it 655 00:37:33,840 --> 00:37:37,319 Speaker 1: until you make it, we can look at Thoranos, the 656 00:37:37,400 --> 00:37:41,400 Speaker 1: company that Elizabeth Holmes founded, or Thoropness. I guess I 657 00:37:41,400 --> 00:37:44,839 Speaker 1: should say, because it's therapy, so it's thoroughness. Her goal 658 00:37:44,880 --> 00:37:46,680 Speaker 1: was to build a machine of running a battery of 659 00:37:46,680 --> 00:37:49,720 Speaker 1: more than one hundred different blood tests using a single 660 00:37:49,800 --> 00:37:53,520 Speaker 1: small blood sample. And you would just use a tiny 661 00:37:53,520 --> 00:37:56,760 Speaker 1: little drop of blood and this device would run tests 662 00:37:56,760 --> 00:37:59,840 Speaker 1: and you could screen yourself for potentially hundreds of diseases. 663 00:38:00,360 --> 00:38:03,320 Speaker 1: Homes stated that it was going to democratize medicine. It 664 00:38:03,320 --> 00:38:06,759 Speaker 1: would give people more power over their own health information. 665 00:38:07,000 --> 00:38:09,480 Speaker 1: It would inform them so they could have better discussions 666 00:38:09,480 --> 00:38:13,000 Speaker 1: with their doctors about their health. And the blood testing 667 00:38:13,040 --> 00:38:17,280 Speaker 1: market was essentially dominated by just a pair of companies, 668 00:38:17,320 --> 00:38:20,480 Speaker 1: just two companies. And that gets back to that narrative 669 00:38:20,520 --> 00:38:22,840 Speaker 1: that a lot of investors really love the idea of 670 00:38:22,840 --> 00:38:27,160 Speaker 1: a new player coming into disrupt and otherwise established system. 671 00:38:27,280 --> 00:38:29,640 Speaker 1: Combined that with the promise of a device that could 672 00:38:29,680 --> 00:38:32,520 Speaker 1: in a matter of hours tell you more information than 673 00:38:32,560 --> 00:38:34,759 Speaker 1: either of those companies could do over the course of 674 00:38:34,840 --> 00:38:38,840 Speaker 1: weeks and using a much smaller blood sample to boot, 675 00:38:39,200 --> 00:38:42,839 Speaker 1: you had a really compelling pitch. Of course, you'd want 676 00:38:42,840 --> 00:38:45,319 Speaker 1: a machine that could do all these things, because who 677 00:38:45,320 --> 00:38:48,440 Speaker 1: wouldn't It would be an amazing benefit to all of humanity. 678 00:38:48,520 --> 00:38:52,520 Speaker 1: You could save lives, you could extend accessibility to people 679 00:38:52,520 --> 00:38:55,800 Speaker 1: who otherwise would be unserved by the health care industry. 680 00:38:56,080 --> 00:38:58,399 Speaker 1: It was the biggest pot of gold at the end 681 00:38:58,600 --> 00:39:03,120 Speaker 1: of the sparkliest rainbow. But of course, to do it 682 00:39:03,880 --> 00:39:06,640 Speaker 1: first you would have to develop the technology and then 683 00:39:06,719 --> 00:39:10,359 Speaker 1: prove that it works. And as it turns out, that 684 00:39:10,440 --> 00:39:13,680 Speaker 1: was a pretty darn big request and much harder than 685 00:39:13,719 --> 00:39:16,920 Speaker 1: Holmes seemed to believe it was. By the way, to 686 00:39:16,960 --> 00:39:19,840 Speaker 1: this day, I am not sure if she was sincere 687 00:39:19,920 --> 00:39:23,200 Speaker 1: in her beliefs that she could pull this off, or 688 00:39:23,239 --> 00:39:27,880 Speaker 1: if she was deceiving everyone, perhaps even including herself, or 689 00:39:27,920 --> 00:39:31,759 Speaker 1: what the situation was now. On the one hand, I 690 00:39:31,800 --> 00:39:35,399 Speaker 1: can forgive some naivete when it comes to technology, because 691 00:39:35,400 --> 00:39:38,239 Speaker 1: technology can do some pretty amazing things. When we talk 692 00:39:38,280 --> 00:39:43,000 Speaker 1: about concepts like Moore's law, and we're essentially saying, hey, 693 00:39:43,239 --> 00:39:45,880 Speaker 1: every two years, computers are gonna be twice as powerful 694 00:39:45,920 --> 00:39:48,319 Speaker 1: as they were two years earlier. Because that's the way 695 00:39:48,360 --> 00:39:49,960 Speaker 1: it is, and that's the way it always has been. 696 00:39:49,960 --> 00:39:52,279 Speaker 1: It's the way it's always going to be. Well, we 697 00:39:52,360 --> 00:39:54,560 Speaker 1: set the stage for us to believe stuff that might 698 00:39:54,560 --> 00:39:57,520 Speaker 1: be a little further out on the fringes, and there 699 00:39:57,520 --> 00:39:59,240 Speaker 1: are a lot of people would argue that even Moore's 700 00:39:59,320 --> 00:40:02,319 Speaker 1: law is coming to its end, but then that's an 701 00:40:02,360 --> 00:40:07,360 Speaker 1: argument that's been made numerous times. So I'm able to 702 00:40:07,400 --> 00:40:09,640 Speaker 1: walk around the world right with what amounts to a 703 00:40:09,680 --> 00:40:13,560 Speaker 1: computer in my pocket. I can access enormous libraries of 704 00:40:13,600 --> 00:40:16,799 Speaker 1: information in an instant through a touch interface. If I 705 00:40:16,840 --> 00:40:18,560 Speaker 1: don't know how to do something, I can pull up 706 00:40:18,560 --> 00:40:22,120 Speaker 1: a video explaining it to me in a heartbeat. Technology 707 00:40:22,200 --> 00:40:26,719 Speaker 1: can transform what used to be impossible into a mundane experience. 708 00:40:27,160 --> 00:40:29,760 Speaker 1: Like the things I'm telling you right now, they aren't special. 709 00:40:29,880 --> 00:40:31,759 Speaker 1: We can all do them with a smartphone or a 710 00:40:31,800 --> 00:40:34,759 Speaker 1: computer or a tablet. It's not like I have some 711 00:40:34,880 --> 00:40:38,239 Speaker 1: magical ability. This is something that we all do every day. 712 00:40:38,280 --> 00:40:41,000 Speaker 1: So I definitely can understand how some people would say, well, 713 00:40:41,040 --> 00:40:44,120 Speaker 1: of course, of course, this is a technological challenge we 714 00:40:44,120 --> 00:40:47,000 Speaker 1: can overcome. We can obviously make some sort of device 715 00:40:47,080 --> 00:40:49,800 Speaker 1: that can do hundreds of blood tests on a single 716 00:40:49,880 --> 00:40:53,640 Speaker 1: drop of blood. That's how investors saw it. The promise 717 00:40:54,440 --> 00:40:59,520 Speaker 1: was so compelling, the benefits would be so enormous to humanity, 718 00:40:59,719 --> 00:41:03,400 Speaker 1: and the profitability of such a technology would be incalculable. 719 00:41:03,920 --> 00:41:07,920 Speaker 1: Investors would inject the startup with around seven hundred million 720 00:41:08,239 --> 00:41:11,200 Speaker 1: dollars in cash. But as anyone who has followed the 721 00:41:11,239 --> 00:41:15,440 Speaker 1: story of of uh Paraos knows, it was a challenge 722 00:41:15,480 --> 00:41:18,480 Speaker 1: that the team could not overcome. Stories broke that the 723 00:41:18,520 --> 00:41:22,080 Speaker 1: company was actually relying upon the very same testing equipment 724 00:41:22,440 --> 00:41:26,840 Speaker 1: created by the competitors that Paraos was meant to disrupt. 725 00:41:27,440 --> 00:41:30,400 Speaker 1: That their team of engineers were working really hard, but 726 00:41:30,440 --> 00:41:32,600 Speaker 1: they had not yet figured out how they could actually 727 00:41:32,600 --> 00:41:36,560 Speaker 1: deliver upon the promise that Holmes had made to her investors. Heck, 728 00:41:36,760 --> 00:41:40,040 Speaker 1: they weren't even sure if it would ever be possible 729 00:41:40,400 --> 00:41:44,080 Speaker 1: based on those parameters. The technology they had developed was 730 00:41:44,200 --> 00:41:47,680 Speaker 1: limited and had issues, and never received FDA approval for 731 00:41:48,080 --> 00:41:50,480 Speaker 1: the majority of the tests it was supposed to be 732 00:41:50,560 --> 00:41:53,240 Speaker 1: able to do, which is probably a good thing, since 733 00:41:53,239 --> 00:41:56,600 Speaker 1: it reportedly could not do most of them. What may 734 00:41:56,640 --> 00:41:59,880 Speaker 1: have happened is that Holmes set her goal based on 735 00:42:00,160 --> 00:42:03,239 Speaker 1: wishful thinking, and that her hope was to use investment 736 00:42:03,280 --> 00:42:07,480 Speaker 1: money to bootstrap the technology and the company so they 737 00:42:07,480 --> 00:42:09,960 Speaker 1: could actually deliver upon the promises being made, that the 738 00:42:09,960 --> 00:42:13,280 Speaker 1: money would give them the security they need to actually 739 00:42:13,360 --> 00:42:18,200 Speaker 1: develop the technology they they wanted to make. Unfortunately, for her, 740 00:42:18,800 --> 00:42:21,520 Speaker 1: and for all the people working for Sarah Nous and 741 00:42:21,640 --> 00:42:24,360 Speaker 1: for all the patients who are dependent upon the company 742 00:42:24,400 --> 00:42:27,640 Speaker 1: providing results to them that were reliable, none of it 743 00:42:27,719 --> 00:42:32,600 Speaker 1: panned out. Now, I've only picked a few examples to 744 00:42:32,680 --> 00:42:34,920 Speaker 1: kind of talk about this fake it until you make 745 00:42:34,960 --> 00:42:38,239 Speaker 1: it trend in the tech business, but trust me, there 746 00:42:38,239 --> 00:42:42,240 Speaker 1: are countless others. There are cases where the technology works 747 00:42:42,360 --> 00:42:47,160 Speaker 1: just fine, like with Uber, but the underlying business model doesn't, 748 00:42:47,440 --> 00:42:50,439 Speaker 1: and in there are cases like Tharohns, where the tech 749 00:42:50,480 --> 00:42:53,200 Speaker 1: itself falls far short of where it needs to be. 750 00:42:53,560 --> 00:42:56,799 Speaker 1: The unifying factor is that these entrepreneurs have to keep 751 00:42:56,880 --> 00:43:00,799 Speaker 1: things moving, or at least appearing to move, in order 752 00:43:00,800 --> 00:43:03,240 Speaker 1: to keep the money coming in to support the overall 753 00:43:03,360 --> 00:43:06,840 Speaker 1: organization until it can actually deliver upon its promise, and 754 00:43:06,920 --> 00:43:10,080 Speaker 1: sometimes that just never happens. Honestly, what this reminds me 755 00:43:10,200 --> 00:43:13,000 Speaker 1: most of out of every experience I've ever had in 756 00:43:13,040 --> 00:43:16,719 Speaker 1: my life is theater. And I don't just mean putting 757 00:43:16,719 --> 00:43:18,920 Speaker 1: on a performance for an audience. I mean theater in 758 00:43:18,960 --> 00:43:21,880 Speaker 1: the sense that if you go to a theatrical production, 759 00:43:22,640 --> 00:43:25,680 Speaker 1: you're looking at a set, and the set looks a 760 00:43:25,760 --> 00:43:28,759 Speaker 1: very specific way, dependent upon the set designer and their 761 00:43:28,800 --> 00:43:31,800 Speaker 1: talents and the people they had, you know, at their disposal. 762 00:43:31,800 --> 00:43:34,640 Speaker 1: So let's say you're going to see a really elaborate set. 763 00:43:34,719 --> 00:43:38,720 Speaker 1: It looks amazing, looks incredible to your eyes. Chances are 764 00:43:39,120 --> 00:43:42,040 Speaker 1: that from the other side, from backstage, that set looks 765 00:43:42,040 --> 00:43:45,520 Speaker 1: like nothing. It looks like cardboard and wood and nails 766 00:43:45,600 --> 00:43:48,400 Speaker 1: and screws poking out at odd angles that you've got 767 00:43:48,520 --> 00:43:50,880 Speaker 1: to watch out for. If you're crossing behind the stage. 768 00:43:51,480 --> 00:43:55,000 Speaker 1: It doesn't look like anything because it doesn't need to. 769 00:43:55,040 --> 00:43:57,880 Speaker 1: The audience doesn't see that part. The only part that 770 00:43:57,920 --> 00:44:01,000 Speaker 1: matters is the part the audience sees. Well, I feel like, 771 00:44:01,040 --> 00:44:03,040 Speaker 1: fake it till you make it is the same thing. 772 00:44:03,440 --> 00:44:06,239 Speaker 1: The only thing that matters is what the investors see. 773 00:44:06,360 --> 00:44:09,239 Speaker 1: And it can be fine for the backstage stuff to 774 00:44:09,239 --> 00:44:12,479 Speaker 1: be messy, because as long as you can keep things 775 00:44:12,520 --> 00:44:15,480 Speaker 1: going long enough so that you can deliver something that 776 00:44:15,600 --> 00:44:18,720 Speaker 1: looks like the set that all the investors were watching 777 00:44:18,800 --> 00:44:21,680 Speaker 1: during the whole production. You're good to go. The problem 778 00:44:21,760 --> 00:44:26,320 Speaker 1: is when you can't do that. Now. I'm all for innovation, 779 00:44:26,560 --> 00:44:29,439 Speaker 1: I'm even for disruption in many cases, but I'm also 780 00:44:29,480 --> 00:44:32,440 Speaker 1: an advocate for critical thinking. Anyone who's listened to this 781 00:44:32,480 --> 00:44:35,439 Speaker 1: show for a long time knows that far too many 782 00:44:35,480 --> 00:44:38,799 Speaker 1: big decisions seem to be based upon people wanting a 783 00:44:38,880 --> 00:44:41,919 Speaker 1: certain idea to be real and practical without any real 784 00:44:42,000 --> 00:44:44,760 Speaker 1: evidence that those ideas can stand up in the real world. 785 00:44:45,120 --> 00:44:49,239 Speaker 1: And while for some people, misplaced trust might mean you 786 00:44:49,320 --> 00:44:52,640 Speaker 1: lose some money, like you know what, that's a that's 787 00:44:52,640 --> 00:44:56,520 Speaker 1: an inconvenient it's terrible, but you can always make more money, right, 788 00:44:56,880 --> 00:44:59,480 Speaker 1: But for other people the consequences can be much more 789 00:44:59,600 --> 00:45:03,640 Speaker 1: life death oriented. So once again I appeal to you guys, 790 00:45:03,719 --> 00:45:07,360 Speaker 1: my listeners, to develop critical thinking skills and to exercise 791 00:45:07,440 --> 00:45:10,520 Speaker 1: them whenever you can. Now, one other thing I want 792 00:45:10,520 --> 00:45:12,720 Speaker 1: to mention if you want to go out there and 793 00:45:12,880 --> 00:45:15,920 Speaker 1: do uh pop up experience to take selfies, go and 794 00:45:16,000 --> 00:45:17,879 Speaker 1: do it, you know, just do it. If it makes 795 00:45:17,920 --> 00:45:20,680 Speaker 1: you happy, that's awesome. If you're going with friends and 796 00:45:20,719 --> 00:45:23,839 Speaker 1: you're all having laughs and you're all enjoying yourselves. That's 797 00:45:23,880 --> 00:45:26,799 Speaker 1: great and the world can use more joy. So go 798 00:45:27,040 --> 00:45:30,120 Speaker 1: do that thing. I'm not trying to shame you. If 799 00:45:30,120 --> 00:45:32,880 Speaker 1: it's something you genuinely have fun doing, you should do it. 800 00:45:33,200 --> 00:45:35,640 Speaker 1: I know I've criticized the whole trend in this episode, 801 00:45:35,640 --> 00:45:39,080 Speaker 1: but that's because I see so many people elevating it 802 00:45:39,239 --> 00:45:43,360 Speaker 1: beyond what it actually is. I don't think there's anything 803 00:45:43,440 --> 00:45:46,960 Speaker 1: inherently wrong about wanting to take a good selfie. I 804 00:45:47,000 --> 00:45:50,359 Speaker 1: just don't think anyone should consider that as an experience 805 00:45:50,520 --> 00:45:53,839 Speaker 1: in of itself. To do so means you're missing out 806 00:45:53,880 --> 00:45:56,799 Speaker 1: on some legitimate experiences out there, and some of them 807 00:45:56,800 --> 00:46:02,320 Speaker 1: are pretty incredible. All right, I'm done. I'm ready to 808 00:46:02,320 --> 00:46:05,959 Speaker 1: go outside. Yell at a passing cloud y'all take care. 809 00:46:06,880 --> 00:46:09,640 Speaker 1: If you have any suggestions for future episodes of tech Stuff, 810 00:46:09,760 --> 00:46:12,160 Speaker 1: you can send me an email the addresses tech stuff 811 00:46:12,200 --> 00:46:13,960 Speaker 1: at how stuff works dot com, or drop me a 812 00:46:14,000 --> 00:46:17,360 Speaker 1: line on Facebook or Twitter. That's text stuff h s 813 00:46:17,600 --> 00:46:21,120 Speaker 1: W can started off by saying, hey, they're grouchy pants 814 00:46:21,400 --> 00:46:24,880 Speaker 1: and follow it with your message. Also, don't forget you 815 00:46:24,960 --> 00:46:27,879 Speaker 1: can go to our website that's tech Stuff podcast dot com. 816 00:46:27,920 --> 00:46:30,120 Speaker 1: That's where you're gonna find an archive of every episode 817 00:46:30,120 --> 00:46:32,520 Speaker 1: we've ever published. You also find a link to our 818 00:46:32,560 --> 00:46:34,919 Speaker 1: online store, where every purchase you make goes to help 819 00:46:34,960 --> 00:46:37,520 Speaker 1: the show, and we greatly appreciate it, and I'll talk 820 00:46:37,560 --> 00:46:44,920 Speaker 1: to you again really soon. Tech Stuff is a production 821 00:46:44,920 --> 00:46:47,920 Speaker 1: of I Heart Radio's How Stuff Works. For more podcasts 822 00:46:47,960 --> 00:46:50,720 Speaker 1: from my heart Radio, visit the i heart Radio app, 823 00:46:50,840 --> 00:46:54,000 Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.